Will property prices continue to rise in Belgium?

According to Belgium’s federation of notaries, the average house price in Belgium was €281,705 in the first quarter of 2021. For an apartment, the average cost was no less than €250,655. In the last five years, property prices have risen by 20%.

Will homes remain affordable?

“We don’t have a crystal ball,” admits Tim Spellemans, mortgage product manager at BNP Paribas Fortis. “But we do know what factors influence property prices, and they obviously include the coronavirus crisis. We still don’t know how the pandemic will affect the economy exactly. So far, job losses have been lower than predicted and the authorities have taken various measures to limit the impact of the crisis. Although government aid will now start to wind down, it currently seems that the positive impact of reopening the economy will outweigh any negative impact of withdrawing support measures.”

“Interest rates are another important factor,” he continues. “They’re still low on a historical comparison. Our bank’s economists expect them to remain at current levels for quite a while to come. For mortgages, a low interest rate means that you can borrow more for the same monthly payment. If interest rates were to rise, that could slow the increase in property prices, but we’re not at that stage yet.”

“So the information we currently have suggests that property prices will continue to rise,” concludes Tim Spellemans. “But this doesn’t mean that homes will become unaffordable.”

New ways of living

The coronavirus crisis has also affected the property market in other ways. Since the first lockdown, working from home has become the norm. “People started paying more attention to domestic comfort, and in particular this has led to greater demand for houses with gardens and apartments with large balconies,” explains Tim Spellemans. “If people continue to work from home more often, they may move further away from their workplaces. A long commute is less painful if you only have to do it two or three times per week.” So property prices could continue to rise in all regions.

Tim Spellemans also expects energy bills to play an increasing role in determining how much a home is worth. “One of the aims of the European Union’s “Green Deal” is for homes across Europe to meet certain standards in terms of energy efficiency. Homes that already meet those standards will find it easier to maintain their value. Other homes will probably need major refurbishment. If that’s the case for your home, don’t forget to check whether you can obtain grants or subsidies for renovation work.”

So based on what we know today, experts are not expecting any rapid fall in house prices.